National News

Barclays boss declines 2013 bonus

Barclays chief executive Antony Jenkins has announced that he will forgo his annual bonus for 2013 after the bank faced "very significant costs" over a series of scandals and carried out a cash call on shareholders.

Mr Jenkins, who took over after predecessor Bob Diamond resigned in the wake of the Libor rate-rigging scandal, said he was proud of the progress made in overhauling the bank's reputation.

But he said legacy and conduct issues had hit the bank hard last year and that, combined with the rights issue in the autumn, it led him to conclude it would not be right to accept a bonus offered by the board.

Mr Jenkins said: "2013 has been a year of considerable positive change for Barclays, and I am particularly proud of the progress we have made in starting to rebuild trust, in defining and implementing a common culture, in repositioning the business for the future, and in significantly improving our balance sheet.

"While all of these actions are in the long-term interests of our shareholders, I am aware of the very significant costs which have been required to address legacy litigation and conduct issues in 2013, as well as to exit assets and businesses we no longer wish to participate in.

"When combined with the substantial rights issue we completed in the autumn, I have concluded that it would not be right, in the circumstances, for me to accept a bonus for 2013, and I have therefore respectfully declined the one offered to me by the Board."

Mr Jenkins would have been entitled to a payout of up to £2.75 million, although he was not likely to have been offered this maximum amount, calculated as 250% of his £1.1 million salary.

He also declined his annual bonus last year, meaning he has yet to receive the payout since taking over at the bank in August 2012. However, he is not thought to be trying to set a precedent of never receiving an annual bonus.

Mr Jenkins is still in line for long-term incentives which will not have been affected by today's announcement.

His decision comes after a year in which the bank added £2 billion to its bill for customer mis-selling scandals.

The compensation pot for payment protection insurance has gone up by £1.35 billion to £3.95 billion.

The sum put aside for redress for small business that were sold complex financial products known as interest rate swaps has risen by £650 million to £1.5 billion.

Large costs have also been incurred as a result of the bank's Transform plan to restore faith in Barclays.

Mr Jenkins has said he is "shredding" the culture and legacy left to him at Barclays by his predecessor.

Mr Diamond received around £18 million in salary, bonus, benefits and vested long-term share awards in 2011, including a near-£2 million annual bonus.

Mr Jenkins is leading an overhaul to improve results and repair the bank's image following the group's £290 million fine for rigging the Libor rate.

He is expected to update on the project on presenting full-year results next week.

The chief executive said at last year's results that at least 3,700 jobs were being cut to reduce costs by £1.7 billion and revealed in shareholder meetings last March that the bank was considering using technology to reduce its workforce further.

Barclays tapped shareholders for £5.8 billion in a rights issue in the autumn after revealing a £12.8 billion hole in its finances.

Last week, the bank denied it was planning a significant reduction in its branch network after speculation that up to a quarter of its 1,600 sites in the UK could close.

It also said it would be setting aside an extra £330 million to cover litigation and regulatory costs when it reports results next month.

Larger sums have been set aside by state-backed lenders Royal Bank of Scotland and Lloyds Banking Group over the last week.

RBS said it was allocating more than £3 billion in additional funds, including £1.9 billion to cover mainly US action over mortgage-backed financial products, while Lloyds today increased PPI provision by £1.8 billion.